Brooks Appraisal Services has answers to "Frequently Asked Questions"


	Brooks Appraisal Services is always prepared to elaborate on any questions you might have about appraisals in Madison County. Feel free to contact us today.

Define the term "Appraisal"
What does an appraiser do?
Why would someone request your services?
How is an appraisal different than a home inspection?
My agent performed a CMA for me. Is that the same as an appraisal?
What can I expect to see in my appraisal report?
Upon completion of the appraisal, how can I have a guarantee that the value indicated is accurate?
How difficult is it to become certified?
Who do appraisers work for?
Where does an appraiser get the information used to estimate values in Madison County or other areas?
How can a licensed appraiser help me?
What exactly is PMI and how can I get rid of it?
Does the appraiser need anything from the homeowner in advance?
What is "Market Value?"
Who has rights to the appraisal report?
Are some home improvements more worthwhile than others?

Define the term "Appraisal" (Go to list of questions)

An appraisal is an estimation leading to an opinion of value. The appraiser must use a number of "approaches," typically three, to draw up the estimation of market value. One of the three is the Cost Approach - which is what it would cost to replace the improvements, less physical deterioration and other factors, plus the land value. The Sales Comparison Approach involves finding comparable properties in the vicinity and discerning value based on making a comparison of those properties to the property being appraised. The Sales Comparison Approach is commonly the most definitive and clearest indicator of value for a home. The third approach is the Income Approach, which is of most importance in appraising income producing properties - it deals with estimating what an investor would pay based on the money produced by the property.

What does an appraiser do? (Go to list of questions)

An appraiser forumlates a professional, unbiased determination of market value, in the support of real property transactions. Appraisers document their analysis in appraisal reports.

Why would someone request your services? (Go to list of questions)

There are a lot of reasons to purchase an appraisal from Brooks Appraisal Services with the usual reason being real estate and mortgage transactions. A few other reasons for getting an report include:

If you are applying for a loan.
If you would like to lower your property tax obligations.
To build a case for a homeowner's equity and remove insurance.
To fight inflated property taxes.
If you need to settle an estate.
To offer you an edge when purchasing a home.
To figure out an honest sales price when selling real estate.
To ensure parties are provided just compensation in eminient domain cases.
Government agencies such as the IRS require an appraisal on every house.
If you ever find yourself in a civil case.

If you need a more detailed explanation of the appraisal process, please click here.

How is an appraisal different than a home inspection? (Go to list of questions)

Appraisers do not do perform residential property inspections and are not home inspectors. A third-party home inspector will investigate the structure of the home, from the top to the foundation. For the most part, a home inspection report will evaluate the amenities and the requirements of the property: air conditioning (weather permitting), electrical services, the condition of the heating system, the plumbing; then the structural integrity of the home such as the attic, accessible insulation, walls, floors, ceilings, windows, then the foundation, basement and visible structures.

My agent performed a CMA for me. Is that the same as an appraisal? (Go to list of questions)

Simply, they have nothing in common. The CMA utilizes market trends to generate most of their business. The appraisal is reliant on similar proven comparable sales. In addition, the appraisal verifies other factors like condition, neighborhood and replacement costs. All a CMA does is generate a "ball park figure." Being a documented and carefully investigated opinion of value, appraisals are defensible and stand up in legal situations.

But the largest differentiator is who's behind the report. Real estate agents produce CMA's, and they don't always know the whole market or bear specific competence when it comes to home valuation. The appraisal is produce by a licensed, certified professional who makes a living out of valuing properties. Further, the appraiser is an unbiased voice, with no conditional interest in the value of a home, unlike the real estate agent, whose income is tied to the value of the home.

What can I expect to see in my appraisal report? (Go to list of questions)

The main objective of an appraisal document is to provide a value opinion, and depending on the scope of the report, you'll usually see the following:

Who engaged the appraiser and whose purposes the appraisal is to serve.
How the appraisal is supposed to be used.
The purpose of the assignment.
The type of value contained and a definition of that value.
The effective date of the appraisal.
Relevant property attributes, including: location, physical attributes, legal attributes, economic factors, the real property interest valued, and non-real estate items included in the appraisal, such as personal property, items that are more or less permanently installed and even intangible items.
Any known easements, restrictions, encumbrances, leases, reservations, covenants, contracts, declarations, special assessments, ordinances, and the like.
Division of interest, such as fractional interest, physical segment and partial holding.
What was entailed in the process of completing the assignment.

For a more in depth view of what goes into an appraisal report click here: Sample Appraisal Report

Upon completion of the appraisal, how can I have a guarantee that the value indicated is accurate? (Go to list of questions)

In the documentation of an appraisal, each appraiser must ensure the following:

The appraisal used a suitable analysis of the data.

Whether individually or collectively, there were no critical errors contained in the report, nor any relevant details left out.

That appraisal services were provided in a careful and conscientious fashion.

The final appraisal report was clear, legitimate and conclusive.

To become a state licensed appraiser, we must meet intense education and experience requirements that give us the background to formulate an unbiased opinion. Likewise, appraisers must abide by a meticulous industry code of ethics and observe national standards of practice for real estate appraisal. The tenets for working up an appraisal and documenting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(Go to list of questions) Regulations regarding licensing and certification of Real Estate Appraisers vary from state to state. However, licensing and certification is commonly associated with many hours of classroom study, tests and practical experience. Once an appraiser is licensed, he/she must then take continuing education courses in order to keep the license up to date. To see the specific requirements for any state click here.

Who do appraisers work for? (Go to list of questions)

Mortgage lenders are an appraiser's most likely client, requesting their services to ensure a home involved in a mortgage transaction is enough to cover a loan balance in the case of default. Appraisers also provide opinions for legal settlements, tax matters and investment decisions.

Where does an appraiser get the information used to estimate values in Madison County or other areas? (Go to list of questions)

One of the primary things an appraiser does is to collect property data. Data can be classified as either Specific or General. Specific data is from the property itself; Location, condition, amenities, size and other specific data are gathered by the appraiser while on site.

General data is gathered from a number of sources. Local Multiple Listing Services (MLS) provide information on recently sold homes that could be used as comparables. Tax records and other courthouse documents verify actual sales prices in a market. Flood zone data is gathered from FEMA data outlets, such as a la mode's InterFlood product.

And most importantly, the appraiser gathers general data from his or her past experience in doing assignments for other properties in the same market.

How can a licensed appraiser help me? (Go to list of questions)

If you're making some sort of financial decision and the value of your home matters, you'll want an appraisal. If you're selling your house, an appraisal assists you in setting a price that maximizes profit and reduces time on the market. If you're buying, it makes sure you don't overpay. If you're engaged in an estate settlement or divorce, it ensures that property is divided fairly. A house is often the single, largest financial asset anybody owns. Don't make decisions in the dark with a professional appraisal.

What exactly is PMI and how can I get rid of it? (Go to list of questions)

PMI stands for Private Mortgage Insurance. It guards the lender in case a borrower defaults on the loan and the market price of the property is less than the loan balance. Once you can prove the amount you owe on your home is less than 80% of the home's market value, you can make a case to your lender to drop the PMI.


	The money you keep from cancelling your PMI will make up for the price of the appraisal in no time. Nobody is more qualified than Brooks Appraisal Services when it comes to analyzing real estate appreciation in Anderson and Madison County. Contact us today.

Does the appraiser need anything from the homeowner in advance? (Go to list of questions)

We begin with an inspection of the home. What this entails is the appraiser, after setting up an appointment, personally going through the home - recording the layout of the rooms, taking photos and documenting the general status of its features. On the home's interior, make sure it is clutter free and that we can access things like furnaces and water heaters. In the yard, trim any bushes so we can be free to get an accurate measurement of exterior walls.

To help speed things along plus ensure a more accurate report, try if possible to have the following items:

Any records on the purchase of the property for the last three years.
A list of any personal property that is part of the home and you intend to be sold with the home, such as an oven, or a washer and dryer, if applicable.
Information on "Homeowners Associations" or condominium covenants and fees.
Locate copies of the current listing agreement, broker's data sheet and, if the sale is "pending", the purchase agreement.
A bill for your most recent real estate taxes which should also contain a legal description of the property.

What is "Market Value?" (Go to list of questions)

In real estate appraising, Market Value (as opposed to Fair Market Value) is commonly defined as:

"The most probable price (in terms of money) which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: the buyer and seller are typically motivated; both parties are well informed or well advised, and acting in what they consider their best interests; a reasonable time is allowed for exposure in the open market; payment is made in terms of cash in United States dollars or in terms of financial arrangements comparable thereto; and the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale."

Who has rights to the appraisal report? (Go to list of questions)

In most real estate transactions, the appraisal is ordered by the lender. While the buyer pays for the report as part of the closing costs, the lender retains the right to use the report or any information contained within. The buyer is certainly entitled to a copy of the appraisal - it's usually bundled with all the other closing documents - but is not entitled to use the report for any other purpose without permission from the lender.

This rule doesn't apply when a home owner engages an appraiser directly. In these situations, the appraiser may stipulate how the appraisal can be used; for PMI removal, or estate planning or tax challenges, for example. If not noted otherwise, the home owner can do whatever they want with the appraisal.

Are some home improvements more worthwhile than others? (Go to list of questions)

The answer to this is different depending upon the location of the home. For example, if you're in a neigborhood of small to medium priced homes, a media room may not be something people in that price range want

As a rule, the most value returned from renovating a home comes in the kitchen. According to one national survey, kitchen remodels returned an average of 88% of the investment. In other words, a $10,000 kitchen remodeling project would add approximately $8,800 to the value of the home. Bathrooms weren't far behind, returning 85%. On the contrary, something that may not increase your value would be painting just for the sake of redecorating.